KPI's are bad for recruitment...

Before joining the recruitment industry wholeheartedly, I, like many others had a pretty rose tinted view of how recruitment worked. It wasn't until it became part of my career did the realisation hit me that far from the focus being on relationships and service, it was instead on sales, closing the deal and hitting KPI's.

Fortunately for me, there are some that believe this to be a waste of time and this has allowed the Courtenay HR business to flourish inside our parent group, where the focus is PRIMARILY on service and relationships. Failing to hit KPI's won't get you into trouble here, but woe betide you if you don't give the candidates and clients the experience they have come to expect. And thats exactly as it should be.

Thinking about that the other day made me realise that actually, KPI's, far from sorting out and highlighting the good recruiters from the bad, actually muddies the waters and can throw up a smokescreen behind which people who are not cut out for recruitment can hide. KPI's, just like Government statistics, seem so easily corruptible and therefore, are actually counter-productive.

In my book, there are only a few things to look out for, when someone first dabbles in recruitment, that highlight whether someone has the 'right stuff' and I look for these things in everyone that joins our business:

Can they take a brief well - can they get to the nub of what the client is looking for and are they able to translate that into something meaningful for candidates
Are the clients interviewing the candidates they propose - the first test. If they are, then its a sign that at the first post at least, they are near the mark.
Are clients inviting the proposed candidates back for second interview - the acid test in my book. An even stronger indication, if achieved consistently, that they are in tune with what the client wants.

Now, some of you may be thinking, "hang on, what about the obvious number 4? Are the candidates making placements?" Well, for me, that's just a matter of time if they have nailed the first three. Sure, you can get the situation where someone keeps getting to the final hurdle and failing, but in my experience that is rare. If they have done 1 - 3 in a professional and service driven manner, it will come. If not, then that's the criteria that shows they are not made for recruitment.

We don't obsess about numbers of CV's sent out, number of interviews arranged, number of calls made or number of 'deals' done. And my advice is that if you want to build a successful recruitment business filled with 'real' recruiters that will stand the test of time, neither should you.

Comment by Siong Hee Chua on April 12, 2010 at 12:17am: Hi Stuart Musson, I agree with you that must recruitment business is gear purely towards generating revenue through placement although businesses have to generate revenue in order to have enough of cashflow for day-to-day operation, paying salary and office rental. Businesses that do not generate revenue will eventually close down. This is the hard fact businesses have to face.

While business can be "number" driven, however, it exist because there are customers in the market that have certain needs that required to be fulfil, therefore customer service is an area that must not be overlook.

Over the years in recruitment, I have learn to qualify the client's requirement at the start such as recruitment history of the position, how long has they been searching for right person, what challenges do they face, salary package, managed their expectation such as delivery timeline, establish a communication with hiring manager whenever possible, etc. As a Consultant, ones will has to build enough of sales pipe as we know that, some deals/staffing requirements will drop off the screen along the way; Furthermore, if the position is a senior role or bear heavy responsibility, companies will tend to take a longer time to come to the final decision for the hiring. Rushing the client's will only show that Consultant lack of customer service, professionalism, etc.

In order to achieve a balance within delivery the "number" and customer service, it is really not easy.

Siong Hee

Comment by Dion Bowden on April 12, 2010 at 1:12am: Sorry. Definitely do not agree with this. Predictive KPI's are the life blood of any sales organisation. Where using KPI's fails is when the management does not understand them and they are not predictive. KPI's highlight training needs, productivity issues and hidden constraints and are a vital string in the management and leadership bow. Ratios between KPI's will highlight and bring to the fore any relationship or service issues long before any empirical observation of behavior.

Comment by Gareth Jones on April 16, 2010 at 9:09am: Wow! I didnt quite expect so many comments. And so varied too! It seems the population is devided although i can pick some key things out. For example i agree with Lisa in that the more you talk to people the better informed you are - my mantra has always been 'talk to more people'. However, i dont believe i need to measure it in terms of calls per day per se as this only encourages crap calls being made. Where I worry is when she says

"When a recruiter is not performing (i.e. having difficulty closing the deal)"

The biggest complaint i get from clients and one of the biggest things that has undermined out industry over the last 15 years has been the 'sales' approach to rectuitment. 'Closing the deal' in my opinion is not the measure of the consultant. Its building the relationship and making successful placements and, perhaps most importantly, gaining repeat business so you dont have to keep making lots and lots of 'new business' calls that annoy clients! I personally think its time we dropped this whole approach.

Generally, if i measure something, it drives a behaviour. And a lot of these sales type KPI's do little but to annoy the clients. for now, thats ok as clients still have to use us in certain areas but that is eroding and I personally think that in the future, i think these KPI's will become less relevant.

Big thank you to everyone that responded here. If you have read my posts before you will know we are in the process of a strategic review of our business model and these comments are a great contribution to that process. Thanks again!